Self-employed workers
Being self-employed means being your own boss. Your profits and losses are considered your income, and you must report them in your income tax return.
You may also have to register for the GST/HST and QST. Read on to learn more.
Got questions? We’ve got answers.
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When you hire an employee, you must:
- collect the required information about them
- register for source deductions as an employer
- calculate source deductions and employer contributions
- remit your source deductions and contributions to us by the deadline
- file tax slips and the RL-1 summary at the end of the year
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As soon as your sales of taxable goods and services (including zero-rated sales) exceed $30,000 in a given calendar quarter or total that amount for the past four calendar quarters, you have to register for the GST/HST and QST.
In calculating your total taxable sales, you must take into account both your taxable sales and your zero-rated sales made worldwide during this period, including those of your associates. The total excludes the GST/HST and QST amounts for the provision of financial services and the amount for capital property sales (e.g. a building or an automobile) and the goodwill of a business.
Once registered, you have to collect the GST/HST and QST on your sales of taxable goods and services (other than zero-rated sales), file returns and remit the tax you collected.
As a registrant, you will be able to claim input tax credits (ITCs) and input tax refunds (ITRs) for the GST and QST paid or payable on goods and services you acquired to make taxable sales (including zero-rated sales).
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A fiscal period is a period of no more than twelve months, at the end of which a business prepares its financial statements.
Fiscal periods normally run from January 1 to December 31. Since you’re self-employed, your fiscal period must end on December 31 for your Québec income tax return.
However, if you elect to have a fiscal period end on a date other than December 31 for your federal income tax return, you must use this same date for your Québec income tax return.
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You have to report your business income from self-employment. To help you report your business income and expenses, you can use form TP-80-V, Business or Professional Income and Expenses. You must enclose the form with your income tax return.
Note that you can submit your financial statements instead of form TP-80-V.
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Office and computer equipment is considered capital property, for which you can claim capital cost allowance. If you’re registered for the GST/HST and QST, you may be able to claim input tax credits (ITCs) and input tax refunds (ITRs) for the GST/HST and QST paid or payable on equipment purchased for your business.
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Being self-employed, you can deduct eligible expenses related to the use of part of your home for business purposes if:
- That part of your home is your principal place of business.
- You use that part of your home only to earn business income, and you meet clients, customers or patients there on a regular and ongoing basis.
To determine how much you can deduct, you must use a reasonable method to figure out to what extent the expense is a business expense if it is related to both your home office and the rest of your home (for example, you can calculate what percentage of the total surface area of your home is occupied by the office).
If you’re registered for the GST/HST and the QST, you may be able to claim input tax credits (ITCs) and input tax refunds (ITRs) for the GST/HST and QST paid or payable on expenses for a home office.
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You can deduct some expenses related to the use of a motor vehicle or zero-emission vehicle, based on the extent to which you used the vehicle for your business. To determine the business use percentage, divide the number of kilometres travelled for business reasons by the total number of kilometres travelled by the vehicle during the fiscal period.
If you’re registered for the GST/HST and the QST, you may be able to claim input tax credits (ITCs) and input tax refunds (ITRs) for the GST/HST and QST paid or payable on expenses for the use of a motor vehicle or zero-emission vehicle.
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You can only deduct up to 50% of your meal and entertainment expenses. There is also a limit on your expenses, which is based on your annual sales.
If you’re registered for the GST/HST and the QST, you may be able to claim input tax credits (ITCs) and input tax refunds (ITRs) for the GST/HST and QST paid or payable on the cost of meals or entertainment.
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You have until April 30, 2024, to file your 2023 return and pay any income tax without us charging interest or penalties.
If you are self-employed, the deadline is extended until June 15. However, since that day falls on a Saturday, the deadline is extended to June 17, 2024, which is the next business day. Note that any balance owing for 2023 must be paid by April 30, 2024. After that date, we will charge interest.
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You can pay a balance of income tax due:
- through your financial institution’s website
- by pre-authorized debit
- in person at your financial institution or an ATM
- by mail
If you’re unable to pay your balance by the deadline, we can make a payment agreement together.
Important
As of January 1, 2024, you must make payments of more than $10,000 electronically (for example, online or through a financial institution), unless electronic payment is impossible due to special circumstances. If you do not, a penalty may be applied.
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Self-employed workers pay income tax every year. Instalment payments are partial payments made four times a year to cover your income tax, contributions to the Québec Pension Plan (QPP) and the health services fund, and premiums payable under the Québec parental insurance plan and the Québec prescription drug insurance plan. Making instalment payments is mandatory in some situations.
Tax credits and deductions if you’re self-employed
Tax tools for the self-employed – Income tax